It's a big relief for electronics manufacturers as the government extends the production linked incentive scheme (PLI) by a year. What does this mean for Dixon Technologies, Atul Lall, MD, of the company discussed with CNBC-TV18.

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Lall said, “Undoubtedly, it is a very positive initiative by the government. This last year, the industry was impacted by COVID so we are evaluating and we are still awaiting the notification. But in our case, in all probability, we are going to be shifting it by a year because, by that, our bar for thresholds for revenue and investments comes down, and we start availing the incentives much faster and we get an extended one year. So, it is a win-win for the industry.”

Talking about demand, he said, “We are a B2B company and we basically manufacture and design for the brand owners. So, there was definitely recovery and improvement in our orderbook in June. Also, the forecast for the next quarter is very good and healthy. However, this is only the primary demand. I hope the secondary sales take place because there is a build-up of inventory for the festive period.”

“The orderbook for us in the next quarter is very healthy. In my case, I am cautiously optimistic. So, one has to just watch and assess, and keep everything under lens as to how are things panning out,” he said while adding that demand recovery is seen in lighting segment, mobiles, and exports.

On margins, Lall said, “To a very large extent we have been able to pass on the increase in commodity prices in the current quarter itself. I feel the kind of pain the industry went through is going to significantly reduce now. However, because of the demand pressure in the current quarter and because of the COVID lockdowns the margins will be lower. Hopefully, we will recover in the fourth coming quarter.” Lall also added that lighting and washing machines are their best margin products.

He added, “My consolidated numbers for the current quarter - April, May, and June is going to be somewhere in the range of around Rs 2,000 crore. So that way the growth is going to be very good. For FY22 I still stand by my guidance that we should be Rs 10,000 plus on the revenue front.”

For full interview, watch accompanying video.

(Edited by : Dipika)

First Published:Jun 29, 2021 10:47 AM IST